EXHIBIT 99.4
IMCLONE SYSTEMS INCORPORATED
NON-QUALIFIED
STOCK OPTION AGREEMENT
AGREEMENT, entered into as of the 24th day of May, 1999, as amended and
restated as of May 31, 2000, by and between ImClone Systems Incorporated, a
Delaware corporation (the "Company") and Dr. Harlan W. Waksal (the
"Executive").
WHEREAS, the Company desires to grant the Executive a non-qualified stock
option to acquire shares of the Company's common stock, $.001 par value per
share ("Common Stock"); and
WHEREAS the Executive desires to accept such option subject to the terms
and conditions of this Agreement.
NOW, THEREFORE, in consideration of the premises and of the mutual
covenants and agreements contained herein, the Company and the Executive, for
good and valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, intending to be legally bound, hereby agree as follows:
1. Grant of Option. The Company hereby grants to the Executive a
non-qualified stock option (the "Option") to purchase all (or any part of)
650,000 (six hundred and fifty thousand) shares of Common Stock (the "Shares"),
on the terms and conditions hereinafter set forth. This Option is not intended
to be treated as an incentive stock option under Section 422 of the Internal
Revenue Code of 1986, as amended (the "Code").
2. Exercise Price. The exercise price (the "Exercise Price") for the
Shares covered by the Option shall be $18.25 (which was the closing price of
the Common Stock on the NASDAQ National Market on May 24, 1999, the date such
grant was approved by the shareholders of the Company).
3. Vesting Schedule. Subject to the terms hereof, including but not
limited to the provisions of Section 6 hereof, the Option shall vest and become
exercisable by Executive in its entirety on May 24, 2006, except that the
Option may vest earlier in accordance with the following schedule:
(a) 200,000 of the shares of Common Stock subject to the option shall
vest as of the first date after any ten consecutive trading days from May
24, 1999 through May 23, 2006 in which the last reported sale price of the
common stock exceeds $25 for all ten consecutive days;
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(b) 200,000 of the shares of Common Stock subject to the option shall
vest as of the first date after any ten consecutive trading days from May
24, 1999 through May 23, 2006 in which the last reported sale price of the
common stock exceeds $34 for all ten consecutive days;
(c) 200,000 of the shares of Common Stock subject to the option shall
vest as of the first date after any ten consecutive trading days from May
24, 1999 through May 23, 2006 in which the last reported sale price of the
common stock exceeds $47 for all ten consecutive days;
(d) 200,000 of the shares of Common Stock subject to the option shall
vest as of the first date after any ten consecutive trading days from May
24, 1999 through May 23, 2006 in which the last reported sale price of the
common stock exceeds $62 for all ten consecutive days;
(e) 200,000 of the shares of Common Stock subject to the option shall
vest as of the first date after any ten consecutive trading days from May
24, 1999 through May 23, 2006 in which the last reported sale price of the
common stock exceeds $75 for all ten consecutive days.
Notwithstanding the foregoing, no vesting will occur until May 24, 2000
with respect to the options referenced in (a) above, and no vesting will occur
with respect to the options referenced in (b) through (e) until May 31, 2000.
4. Term of Option; Termination.
(a) Basic Term. The Option shall expire on, and not be exercisable
following May 24, 2009; provided, that the Option is subject to earlier
termination as provided in Section 4(b) and Section 4(c).
(b) Termination of Employment. Upon the termination of the
Executive's employment relationship with the Company or a subsidiary
thereof for any reason other than by reason of the death or disability of
the Executive, (a) the right to exercise any unvested Option or unvested
portion of any Option shall terminate on the date of termination of
employment and (b) the right to exercise any Option or portion of any
Option which is vested as of the date of termination of employment shall
terminate upon the earlier of (i) the thirtieth day following such
termination of employment or (ii) the date such Option or portion of an
Option would have expired had it not been for the termination of
employment. The Option may not be exercised after its expiration in
accordance with the foregoing terms. Notwithstanding the foregoing, if
Executive's employment with the Company or any subsidiary is terminated in
connection with, or as a result of, a Change of Control, the Option shall
vest and become immediately exercisable and Executive will
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have a period of 30 days in which to exercise the Option or any portion
of the Option.
For purposes of this Agreement, "Change of Control" means the first of the
following events to occur following the date hereof:
(i) Any individual, entity or group (within the meaning of
Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934,
as amended (the "Exchange Act")) (a "Person") shall become the
beneficial owner (within the meaning of Rule 13d-3 promulgated under
the Exchange Act) of more than 51% of the then outstanding shares of
Common Stock of the Company; or
(ii) The consummation of any reorganization, merger or
consolidation with respect to the Company (each a "Reorganization"),
unless following such Reorganization more than 51% of the outstanding
equity of the entity resulting from such Reorganization continues to
be beneficially owned, directly or indirectly, by the shareholders of
the Company; or
(iii) The sale or other disposition (or the last in a series of
such transactions) of all or substantially all of the assets of the
Company, other than to an entity with respect to which following such
sale or other disposition more than 51% of the outstanding equity is
beneficially owned, directly or indirectly, by the shareholders of
the Company.
(c) Death or Disability of Executive. In the event that the Executive
dies or is disabled while he is an Executive of the Company or a
subsidiary thereof, the Option shall be exercisable only within the next
12 months immediately succeeding such death or disability, and then only
(a) in the case of death, by the person or persons to whom the Executive's
rights under the Option shall pass by will or the laws of descent and
distribution, and in the case of disability, by the Executive or his legal
representative, and (b) if and to the extent that the Executive was
entitled to exercise the Option at the date of his death or disability.
The unvested portion of the Option shall terminate immediately upon the
date of such death or disability.
5. Transferability.
(a) The Option shall not be transferred or otherwise assigned in any
manner otherwise than by will, by the laws of descent and distribution,
pursuant to a qualified domestic relations order ("QDRO") as defined by
the Code or Title I of the Employee Retirement Income Security Act of
1974, as amended, or the rules thereunder or a member of
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the immediate family of the Executive, within the meaning of Rule
16a-1(e) of the Exchange Act, a trust for such family members, a
partnership whose only partners are such family members or a charitable
institution within the meaning of Section 501(c)(3) of the Code (each an
"Authorized Transferee"). During the Executive's lifetime, the Option
shall be exercised only by the Executive, the Executive's guardian or
legal representative, or the Executive's Authorized Transferee. The terms
of this Agreement shall be binding upon the heirs, executors,
administrators, successors and assigns of the Executive. Any purported
transfer of the Option or this Agreement contrary to the provisions of
this Section 5 shall be null and void ab initio.
(b) By acceptance of this Option and execution of this Agreement, the
Executive hereby agrees, on his own behalf and on behalf of his heirs,
executors, administrators and assigns that, in connection with any
underwritten public offering of shares of Common Stock, the Executive and
the Executive's heirs, executors, administrators and assigns will enter
into such restrictions on the sale or transfer of the shares of Common
Stock issuable upon exercise of this Option as the Company and any
underwriter(s) for such offering may reasonably request in order to
facilitate the offer, sale and distribution of securities of the Company
in connection with such offering, whether or not this Option has been
exercised at the time of such offering.
6. Method of Exercising Option; Full Payment. Subject to the terms of
Section 4(b) and Section 4(c) hereof, the Option granted hereby may be
exercised only if Executive was, at all times during the period beginning on
the date hereof and ending on the date of such exercise, an employee of the
Company or a subsidiary. The Option shall be exercised by written notice to the
Company, addressed to the Company at its principal place of business. Such
notice shall state the Executive's election to exercise the Option and the
number of shares of Common Stock in respect of which it is then being
exercised, and shall be signed by the Executive. Such notice shall be
accompanied by (a) this Agreement (which, if not then being exercised by the
Executive for all the shares of Common Stock then remaining subject to the
Option granted hereby, shall be appropriately endorsed and returned to the
Executive); (b) payment of the full purchase price of such shares, which
payment shall be in cash at the time of exercise; and (c) such written
representations and other documents, including legal opinions, as may be
desirable, in the opinion of the Company's legal counsel, for purposes of
compliance with state or Federal securities or other laws. The Company shall
deliver a certificate or certificates representing shares of Common Stock
purchased pursuant to such notice to the Executive as soon as practicable after
receipt of such notice, subject to Section 10 hereof.
7. Capital Adjustments. If any change is made in the shares of Common
Stock subject to the Option (through merger, consolidation,
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reorganization, recapitalization, stock dividend, split-up, combination of
shares, exchange of shares, issuance of rights to subscribe, or change in
capital structure), appropriate adjustments may be made by either the Committee
(as defined below) or the Board (as defined below) as to the maximum number of
shares subject to the Option and the number of shares and price per share
subject to the Option as shall be equitable to prevent dilution or enlargement
of option rights of the Executive. Any determination made by either the
Committee or the Board under this Section 7 shall be final, binding and
conclusive upon the Executive.
8. Administration; Interpretation. The Option and this Agreement shall be
administered by any of the Compensation and Stock Option Committee of the
Company (the "Committee") or the Board of Directors of the Company (the
"Board"). The interpretation and construction by the Committee or the Board of
the provisions of the Option granted hereunder and of this Agreement shall be
final, unless in the case of the Committee otherwise determined by the Board.
No member of the Board or of the Committee shall be liable for an action taken
or determination made in good faith.
9. Rights as a Shareholder. The Executive shall have no rights as a
shareholder with respect to shares of Common Stock subject to the Option
granted hereby until the date of the issuance to Executive of a stock
certificate in respect of such shares. No adjustment shall be made for
dividends or other rights for which the record date is prior to the date such
stock certificate is issued.
10. Legal Requirements, Etc.
(a) Legal Requirements. The Company shall not be required to issue
certificates for shares upon the exercise of the Option unless and until,
in the opinion of the Company's legal counsel, such issuance would not
result in a violation of any state or federal securities or other law. As
a condition to the exercise of the Option, the Company may require the
Executive to make any representation or warranty to the Company as may be
required by applicable securities laws or any other law or governmental
regulation. Certificates for shares, when issued, shall have, if required
in the opinion of the Company's legal counsel, the following legend, or
statements of other restrictions, endorsed thereon, and may not
immediately be transferable:
"The shares of Common Stock evidenced by this certificate
have been issued to the registered owner in reliance upon
written representations that these shares have been purchased
for investment. These shares may not be sold, transferred, or
assigned unless, in the opinion of the Company and its legal
counsel, such sale, transfer, or assignment will not be in
violation of the Securities Act of 1933, as amended,
applicable rules and regulations of the
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Securities and Exchange Commission and any applicable state
securities laws."
11. Private Offering. By the act of accepting this Option and executing
this Agreement, in the absence of an effective registration statement under the
Securities Act of 1933, as amended, the Executive hereby agrees that upon
exercise of such Option, he will acquire the shares of Common Stock that are
the subject thereof for the purposes of investment only, and not with any
intention at such time to resell or redistribute the same, and the Executive
hereby agrees that he shall upon request of the Company confirm such agreement
at the time of exercise in a writing reasonably satisfactory to the Company and
its counsel; provided, however, that the neglect or failure to confirm the same
in writing shall in no way be construed or interpreted to be a limitation of
such agreement. Executive further acknowledges that shares of Common Stock
issuable to him pursuant to the terms of the Option, even once registered
pursuant to a Registration Statement on Form S-8, may be considered "control
securities" subject to the resale restrictions of Rule 144 of the Securities
Act of 1933.
12. Right of the Company to Terminate Relationship. Nothing contained in
this Agreement shall confer upon the Executive any right to be continued as an
employee of the Company or any subsidiary thereof, or interfere in any way with
the right of the Company or any subsidiary thereof to terminate such
relationship for any reason whatsoever, with or without cause, at any time.
13. No Obligation to Exercise. The granting of the Option hereunder
shall impose no obligation upon the Executive to exercise such Option.
14. Tax Requirements. The exercise or surrender of this Option shall
constitute the Executive's full and complete consent to whatever action the
Committee or the Board elects to satisfy the federal and state withholding
requirements, if any, which the Committee in its discretion deems applicable to
such exercise.
15. Governing Law. This Agreement and the Option granted hereby shall be
governed by, and construed and enforced in accordance with, the laws of the
State of New York from time to time in effect.
16. Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall constitute a duplicate original, and all of
which together shall constitute one and the same instrument.
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IN WITNESS WHEREOF, the Company has caused this Agreement to be executed,
by its officer thereunto duly authorized, and the Executive has executed this
Agreement, all as of the day and year first written above.
IMCLONE SYSTEMS INCORPORATED EXECUTIVE
By:
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John B. Landes (Sign name)
General Counsel
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Dr. Harlan W. Waksal
Address:
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Telecopier Number:
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Social Security Number:
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